Question

Why is NPV equal to zero in an efficient market?

Answer 1

Prices of securities fully reflect available information
All investments in an efficient market are zero NPV investments. Equivalently, because information is impounded in prices, investors should be expected to earn a normal rate of return.
Firms should receive fair values for securities they sell. Investors should not be fooled. Timing to sell securities should not work.

These conditions imply that new information will be quickly reflected in prices. Furthermore, since new information, by definition, is unpredictable (arrives randomly), price changes will be unpredictable (random).

An efficient capital market is one in which:
Prices fully reflect all available information.
On average, the difference between the actual price and the expected price, given investors information, is zero.
Prices would not change if everyone made public all the information that they had.

I